Since the 80’s, Vietnam has been a success story. The country’s development has helped make Vietnam a middle-income economy in just one generation. With economic reforms and beneficial global trends, the country’s GDP per capita increased 3.6 times from the early 2000s to 2021. In addition to this, the poverty rate declined from 14% to 3.8% within a decade (2010-2020). 

Vietnam’s economy was proven to be resilient, with its GDP projected to ease to 6.3% in 2023. As a Tiger Cub economy, this Southeast Asian nation could follow the same growth model as the Four Asian Tigers (Hong Kong, Singapore, South Korea, and Taiwan). Vietnam’s future growth makes it an attractive destination for foreign investments and businesses.   

Are you hoping to outsource to Vietnam? You may find this country to be the perfect fit for your business needs. Read more below on what you should know before outsourcing to Vietnam. 

Outsourcing Factors in Vietnam You Need to Consider 

1. Cost Efficient 

One of the many advantages of outsourcing to Vietnam is its cost efficiency. There is a huge availability of skilled talents for a lower cost. Compared to their counterparts in the US or Europe, Vietnamese rates are significantly lower. 

Foreign companies can save almost 90% of costs by outsourcing to Vietnam. Popular outsourcing destinations such as India, China, or the Philippines may even prove to be more expensive than outsourcing to Vietnam.    

2. Young and Educated Population 

As of 2021, the working population in Vietnam was recorded at approximately 75 million people. They make up 68.7% of the population. These people are skilled and are continuing to upskill with many vocational centers available to assist them. This makes Vietnam one of the top countries with the highest adult literacy rate in the Asia Pacific region.  

The Vietnamese government has also prioritized education in engineering and science after seeing the demand for software development outsourcing. The country offers training in different programming languages within various universities and technical schools boosting their IT graduates each year. 

3. Socioeconomic Stability 

Vietnam is more socio-politically stable compared to other Southeast Asian countries. They’re ranked the 41st most peaceful country among 163 countries in the 2023 Global Peace Index — up four places compared to the 2022 study. Companies hoping to outsource can expect great business without the threat of any large conflicts. 

Furthermore, Vietnam’s economy has flourished over the years. As mentioned above, Vietnam is a rapidly developing and high-growth destination for international businesses and foreign investments. Consistently high-performing economic and market growth, as well as a stable political system, are considered positive business conditions for any company looking to conduct business in the country.  

4. Good Business Environment   

Vietnam is one of the best places to do business. Their government has a free trade agreement with the US and the European Union. Along with a skilled workforce and cheaper labor costs, these factors are slowly turning the country into a hotspot for Foreign Direct Investment. 

Their government has also introduced Resolution 55. It aims to amend regulations that “inhibit foreign investments and by codifying quality, efficiency, advanced technology, and environmental protection criteria.” The resolution aims to attract USD 50 billion in foreign investments by 2030. 

5. Big Business Presence 

Vietnamese is a global hub for several multinational companies. These business giants have settled in Vietnam by outsourcing their various business needs. These companies include Microsoft, LG, Samsung, Intel, and more. In addition, other companies like IBM, Sony, and Cisco are looking to expand their business in Vietnam. 

This shows the capability of the country. As a hub for these big businesses, the Vietnamese workforce is supporting these businesses to provide the best services for the global market. It also shows Vietnam’s credibility as a country where conducting business is excellent and easy. 

Notable Industries in Vietnam 

Vietnam has only been open to conducting business with the global market for a few decades. The country moved from a traditional agricultural economy to an open economy for foreign investments through the years. Nonetheless, Vietnam is a notable leader in producing commodities like coffee, rice, rubber, and other products.   

Throughout the pandemic, Vietnam also grew its industry and construction sector. The manufacturing industry continues to thrive through pharmaceuticals, metal production, electric products, computers, and more growth.  

Aside from those mentioned above, the major industries in Vietnam are: 

• Rice 

• Coffee 
• Rubber 
• Fish 
• Poultry 

Outsourcing Challenges in Vietnam 

Vietnam is a great outsourcing destination for many foreign companies. But some companies may worry that Vietnam didn’t have a unified data protection law for the longest time. But this shouldn’t bother you as this long-time problem was recently addressed. Vietnam’s first-ever consolidated Personal Data Protection Decree (PDPD) took effect last July 1, 2023. As this is newly established, it may take more time to learn if this would sufficiently address data concerns in the country. 

Another source of concern may also be the low English proficiency in the country. Even though it is the working language in the country, many Vietnamese workers are not as proficient causing a language barrier problem. However, this is a challenge that you can address earlier with your outsourcing partner to prevent any miscommunication problems.  

Outsourcing in Vietnam 

Before looking to outsource, choosing a great destination is a must. A fantastic outsourcing destination will offer your business all the best sides of the outsourcing industry. Just look at Vietnam. The country is a stellar option for those choosing to outsource because it is cost-efficient and a hub for big multinational companies.  

The Vietnamese workforce is full of competent and skilled talents and the country is proven to be a place where business is easy to conduct. Vietnam is also a growing economy that can present a lot of opportunities for your business. Moreover, there is less threat of sudden socioeconomic problems as Vietnam is stable compared to other countries. 

Vietnam is a hotspot for many businesses looking to outsource. Are you hoping to join these businesses to look for your Vietnamese outsourcing partner? Let us help you out!  

Book a FREE appointment with Outsource Asia experts today.